A federal court has granted bail to two Muslim men who were detained earlier this month after an FBI-sting operation in Albany, New York, about 250 kilometers from New York City. New information that a significant part of the government's case was based on an incorrectly translated document caused the judge to change his earlier decision. Bail has been set at $250,000 each for two leaders of a mosque located in the state capital of New York. The men were arrested on charges of money laundering and supporting terrorism.

The judge said new evidence made the case appear "less strong than it did" when he called the men a flight-risk and ordered that they be held without bail.

A translator for the FBI brought the mistake to light last week. A page from an address book was initially said to contain one suspect's name and his Albany address, along with the title, "the commander." Upon review, the FBI translator said word was actually Kurdish for "brother."

Defense lawyer Terry Kindlon says the government used the document to allege that his client has terrorist links.

"Like everybody that I was in the Marine Corps with, 40 years ago, was my brother," said Mr. Kindlon. "Everybody that you go to church with is your brother. Every Muslim as I understand it, refers to every other Muslim as brother. So the value of this information as proof is absolutely zero. It doesn't mean a thing."

Mr. Kindlon is representing Yassin Aref, a 34-year-old Kurd who fled Iraq several years ago and was granted political asylum in the United States. Mr. Aref and Mohammed Hossain, a 59-year-old naturalized American citizen originally from Bangladesh, were both arrested on August 10 after a yearlong FBI-sting operation.

Federal authorities say an undercover informant told the men that he was purchasing a shoulder-fired missile and intended to attack the Pakistani ambassador in New York City. The indictment alleges that Mr. Hossain agreed to launder $50,000 through his pizza shop in exchange for a share of the profit, and that Mr. Aref witnessed the transaction.

Mr. Kindlon says his client did witness the transaction, then made and photocopied receipts that were signed by all three parties.

"This is the point where I smack myself on the forehead with the palm of my hand and I say, 'wait a minute! You're charging him with money laundering and he is making the best record he knows how?' What money launderer does that? Money laundering is sneaky, behind-the-garage kind of stuff. It's not something you do and memorialize and make a record of for everybody to get a copy," he added.

Neither the missile nor the plot to kill the ambassador ever existed. Defense lawyers say the government was overzealous in its attempt to ensnare the two suspects. Prosecutors are standing by their case, saying that the men knew they were involved in a criminal plot and should be punished.